How India goes to work
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How India goes to work

The people who benefited most from India’s economic success were those on top of the job pyramid. At the bottom, jobs turned informal, wages fell, insecurity grew. Chitrangada Choudhury reports.

india Updated: May 13, 2009 01:14 IST
Chitrangada Choudhury
Chitrangada Choudhury
Hindustan Times

Striking stats
836 million people — that's 75 per cent of India — live on less than Rs 20 a day.
In Maharashtra’s erstwhile textile town of Solapur, Radha Galpelly, a bidi roller, had a wage hike -- taking her pay to Rs 1,200 per month – for the last time in 1998. Her husband Amjayya's income has been slashed by half since he turned a contract worker at a local garment-manufacturing unit. For, the ageing textile mill where he had a regular job closed down.

In Delhi, Raj Singh (name changed on request) sells insurance policies and doubles up as a night watchman to earn enough to send his two children to an English medium school.

While the Galpellys are battling rising prices with reduced incomes, Singh has to juggle two jobs to meet his family's needs.

And this is how India’s economic success story has bypassed its unorganised sector — from agriculture to micro industries to self-employment — covering 85 per cent of the total workforce.


The Commission analysed job statistics to compare two decades — 1983-94 and 1994-2005. Its findings:

Between 1993-94, employment grew at 2.03% annually. From 1994-2005, the rate was 1.85%

Growth rate of wages, including casual work—the bottom layer of workers— declined during 1994-2005 compared to the previous decade net

Growth of employment
from 1999-2000 to 2004-05 has been largely informal, increasing the vulnerability of workers from this sector

The public sector
added 2.87 million jobs between 1983 and 1993 but shed 1.46 million between 1993 and 2006; the private sector added 30,000 formal jobs during 1983 and 1993 and another 92,000 during 1993 and 2006

In its final report to the government, the National Commission for Enterprises in the Unorganised Sector, set up in 2004 to recommend a better deal for the unorganised sector, found that the job growth from 396 million in 2000 to 456 million in 2005 happened mostly as informal employments, offering neither job nor social security to workers.

For, they were mostly contracting and outsourcing jobs, showing a marked decline in the share of the manufacturing sector in job generation. The gamut of economic changes since the early 1990s, and impressive growth rates in recent years, have not translated into a better deal for most of the workers in this sector.

The report, The Challenge of Employment… said impressive salary jumps were limited to “a top, but thin layer” of managerial and supervisory jobs in the corporate segment of the manufacturing and service sectors.

Commission chairman Arjun Sengupta said, “We have given our findings, and recommendations on how to create a level playing field to Prime Minister Manmohan Singh. We have to see who forms the new government, and how strongly these issues get addressed.”

Poor and vulnerable
Radha Galpelly: Prices are constantly rising but her monthly salary has remained stuck at Rs 1,200 since 1998.
The report categorised over 75 per cent of India — 836 million people — as "poor and vulnerable", living on less than Rs 20 a day. The segment "has experienced very low rates of improvement in living standards as a whole since the early 90s."

So, why has the lot of India’s working poor not improved despite the shining growth story since the early 1990s?

Sengupta said, “Reforms have certainly led to impressive growth, but not improved the quality of lives or employment. Trickle down is not working. State policies need to pay special attention to people in agriculture and small industries...”

The report said the informal segment still faced constraints like lack of access to credit, technology, marketing, skill development and also incentives. And public policies are partial to the formal private sector through Special Economic Zones, cheaper credit, export incentives and tax breaks.

First Published: May 13, 2009 00:04 IST